Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E)
If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change?
A) The equilibrium point will move from E to C. B) The equilibrium point will move from E to A.
C) The equilibrium point will remain at E. D) The equilibrium point will move from E to B.
B
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Firms will sometimes not raise their prices, even when there is a large increase in demand for their products because they fear consumers will consider the price increases unfair.
a. true b. false
Entry of a second firm will result in a downward shift in the ATC curve.
Answer the following statement true (T) or false (F)
According to new classical economists, the:
A. short-run demand for labor curve is vertical. B. short-run aggregate demand curve is vertical. C. long-run aggregate supply curve is horizontal. D. long-run aggregate supply curve is vertical.
If the Fed raises its target for the federal fund rate, this indicates that
A) the Fed is pursuing an expansionary monetary policy. B) the Fed is pursuing a contractionary monetary policy. C) the Fed is attempting to combat deflation. D) The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.